Have you ever been the low bidder on a construction project you wanted but didn’t get awarded the contract? Bidding lots of jobs is not enough to guarantee a steady flow of profitable work in today’s competitive marketplace. Successful general contractors, subcontractors, and suppliers have learned that their bid is only one of many required steps in the sales cycle.
As a commercial general contractor, we bid several jobs every month to keep our pipeline full. For each project, we receive about 100 subcontractor bids for the 30 subtrades usually required. On average, less than 10% of these bidders ever call us to present their bid, review their proposal, offer value-added ideas, or offer even to meet with us for any reason. When we don’t hear from our valued subcontractors, we assume they don’t have more to offer except their price. And when someone finally does call, the only sales pitch offered is “Do you have the bid results yet?” or “How do we look?” When I get this question, my first sarcastic thought is This is not a convincing reason to hire your company. I also think you’ll look even better if you do more than the minimum required, lower your price, or do the job for free!
Do You Sell More Than Price?
Most contractors and subcontractors are proud of their quality work, reputation, and personal service. And today’s financial demands, project complexities, and tight schedules require project owners to often look for more than low bid providing the minimum per plans and specifications. But if customers aren’t aware of the added value or differentiating factors contractors can offer, the buyer has no choice but to evaluate, select, and award contracts based on price. As a professional business coach to the construction industry, I talk to hundreds of contractors in all parts of the country every year. I recognize the top things that successful contractors, subcontractors, and suppliers do to get more than their share of the available profitable work. See how your company compares to this list of 10 winning strategies.
- Written Marketing and Sales Plan
Companies that plan their future, create their future. Sit down and write your sales and marketing plan. Include your annual sales and profit goals, customer targets, market areas, project types and sizes, customer contact frequency, plan to meet with customers, strategies to differentiate your company from the competition, proactive bid follow-up system, bid-hit-win tracking, website and social media initiatives, conference attendance, going to sporting events with customers, and the action steps to achieve the results you want to hit.
2. Marketing Budget
Companies that invest in their future make more money than those who don’t. Create an image, logo, website, brochure, and marketing materials to build a positive perception of who you are, what you stand for, and what you specialize in. Invest at least $20,000 to $35,000 per year on marketing, mailings, email newsletters, flyers, customer events, meals, ballgames, golfing, thank you gifts, and postcards to send out to customers. Note: this small amount does not include the cost for salespeople or estimators. Remember: any marketing is better than no marketing. But be consistent and diligent with your ongoing drip-drip-drip process.
3. Customer Relationship Program
Identify your top 20 current and potential customers you want to focus your sales efforts on. Commit to invest spending time with each of them at least once every two to three months in a relationship-building setting. These times together include meals, association meetings, golfing, fishing, hunting, charity events, or professional and college sporting events. Make sure you stay in touch with customers who can and will make you the most money. Go and see them at least four times per year. You can’t build a trusted relationship unless you invest time to develop a relationship by getting to know each other.
4. Target Marketing Mailing Program
Keep a database of your loyal, repeat, potential customers, and referring parties. Use a proactive CRM software program like HubSpot, Unanet, Pipedrive, Leap, or Follow-Up CRM to keep track of your contacts, meetings, bids, proposals, and follow-up activities. Send or email something to your entire customer target list every two to three months to keep your name in front of them, pique their interest, inform them of your unique qualifications, and tell them what you can do for them. Keep the constant customer strategy simple. Send out emails, updates, photos, videos, articles, postcards, flyers, new product updates, project announcements, birthday gifts, holiday cards, and fun things to make them smile.
5. Expertise, Specialty, or Niche
Successful contractors are known for being the best at something. Some are known for project types, difficult jobs, fast track, design-build, or technical expertise. To be perceived as the best contractor in your expertise, your customer must be told often and understand what services or project types you specialize in. If you market your company as a jack of all trades that builds any type of project for any type of customer, you will not be perceived as an expert in any project type. Let them know what you focus on and are best at, and then tell them why over and over again.
6. Sales and Presentation Skills
Winning great jobs requires professionalism, knowledge, and confidence. Firms who are awarded more jobs than their competitors are well trained and competent in sales and presentation skills. They show up at the project interview ready to impress with their team rehearsed, dressed like pros, and ready to ask for the order. They use photos, charts, CPM schedules, graphs, power-point presentations, photos, examples, customer testimonials, value-added propositions, cost saving ideas, and lots of visual props to get their point across. Remember, a picture is better than a thousand words, and people retain what they see versus what they read.
7. Right Place at the Right Time
Estimators are more than price calculators and bid givers. They are also in the sales business and must spend lots of time developing confidence and trust with their customers. To be in the right place at the right time, you must be in your customer’s office at least once a week. Successful estimators create partnership relationships with customers by spending time working with them on value engineering ideas, solutions to difficult problems, and seeking better ways to build projects. Are you a price giver or problem solver? Customers want to hire people who solve problems for them and make their life easier and stress free.
8. Referral Solicitation Program
The easiest way to double your sales is to ask loyal customers for a referral. Referrals don’t come often without asking, and when asked, customers will give. A simple checklist is all it takes to remind you when and who to ask. Call your last 10 customers and take them to lunch to thank them for the work. Then at the end of lunch, ask them for a referral. I guarantee you’ll get all the work you can handle if you spend more time in sales than you do worrying about ordering materials and scheduling your crews.
9. Active in Industry and Community
Successful companies are seen by everyone, everywhere, all the time. They are active in their industry associations, local charities, and community organizations. They serve on boards of directors and give time and money to make things better for the people around them. When you are perceived as a helper and giver, people will notice and call you to help them build their projects too.
10. Cutting-Edge Technology
Leading companies use the latest tools, techniques, software, and technology to stay ahead of their competition and lead their customers. They show the future to customers instead of complaining about change. What are you waiting for? What are your competitors doing that you should be doing? Perhaps you need to implement fully integrated project management software to manage your projects and communicate with customers instantly. What can you be the first to use? The longer you wait, the farther behind you get. Contractors who are still waiting to use the new technologies and systems will fall behind and not win many contracts going forward.
To increase your chances of winning more than your share of profitable jobs, consider implementing these 10 tips. Make your bid only one small part of the selling process and join the list of very successful companies. RB
George Hedley CPBC, is a certified professional construction business coach, consultant, and popular speaker. He helps contractors build better businesses, grow, profit, develop management teams, improve field production, and get their companies to work.
